Jury Indicts 5 Florida Men In Precious-metals Operation

April 24, 1985|By Maurice Possley.

Five Florida men were indicted Tuesday by a federal grand jury in Chicago on charges of operating a precious-metals ``boiler room`` fraud that bilked 1,200 customers nationwide out of an estimated $12 million.

Assistant U.S. Atty. Victoria G. Meyers said the five defendants operated Universal Precious Metals Inc., a Ft. Lauderdale commodities business that took in the $12 million between April, 1981, and December, 1982.

The five men, all of whom live in Ft. Lauderdale, ``falsely assured``

customers that the company was purchasing commodities contracts and precious metals on their behalf, Meyers said. About 20 of the customers were from Illinois, the rest from across the country.

Instead, according to the indictment, the customer funds were spent by the defendants for their own personal use.

FBI agents raided the offices of Universal in September, 1982, and recovered more than $3 million in assets, including negotiable government bonds, 350 ounces of silver bullion, 3,200 ounces of silver coins and 1,000 silver dollars.

In December, 1982, the Commodity Futures Trading Commission obtained a cease-and-desist order and shut down the firm. A receiver was appointed, and customers eventually were reimbursed about $12 each, Meyers said.

Operations such as Universal acquired their nickname because the suspects masquerade as representatives of respectable companies when, in fact, the entire headquarters may be little more than a desk and a bank of telephones in a basement. Sales personnel routinely make telephone calls at random to potential victims and promise huge, unrealistic returns on investments in precious metals.

An affidavit filed earlier in the Universal case quoted Rose as telling employees: ``This is a cold, unemotional business. You cannot get involved in emotions. Seventy-five percent of these SOBs are going to lose their money (to somebody). So let`s get them in.``

Customers were falsely told that Universal actually purchased the silver and gold that was ordered and that it was stored in warehouses on their behalf, the indictment charged.